Introduction to Record Keeping

Making Tax Digital requires you to keep digital records of your property income and expenses throughout the tax year. This means recording rent received, mortgage payments, repairs, insurance, and other property business transactions using MTD-compatible software.

Digital record keeping replaces the old approach where landlords kept paper records or spreadsheets and entered everything once a year. Under MTD, you record transactions regularly throughout the year, and Provestor uses these records to send your quarterly updates and final declaration to HMRC.

The records you create in Provestor form the foundation of your MTD compliance. They need to be accurate, complete, and stored digitally — but the process itself is straightforward once you establish a routine.

What you're recording

You're recording income and expenses for your property business only.

This includes:

  • Rental income received
  • Mortgage interest
  • Repairs and maintenance
  • Insurance premiums
  • Professional fees
  • Agent fees
  • Other allowable property expenses

What you don't record here: Salary income, bank interest, dividends, pensions, or other non-property income. These go on your final tax return at the end of the year, not in your regular property record keeping.

For more detail on HMRC's digital record keeping requirements, see Digital record keeping explained.

Why you need to do this

Making Tax Digital for Income Tax requires you to keep digital records and submit quarterly updates to HMRC.

Your digital records feed two key submissions:

  • Quarterly updates (four times per year) — Cumulative totals of income and expenses from 6 April to the end of each quarter
  • Final declaration (by 31 January) — Your complete tax return for the year, including adjustments and reliefs

The quarterly updates don't calculate your final tax bill — they just keep HMRC informed of your business activity throughout the year. The final declaration is where your actual tax liability is calculated.

How record keeping works in Provestor

All record keeping in Provestor happens through accounts in your Property Business workspace. You'll see your accounts listed in the left-hand navigation — for example, Cash, Business Bank Account, or Letting Agent.

These accounts were set up when you first created your Provestor account, based on how you manage your banking. If you completed setup, your accounts are already configured. See How to set up bank accounts if you need to review your account structure.

Two ways to add transactions

1. Upload statements (bank or letting agent)

Drag and drop your bank statement or letting agent statement into Provestor. The AI extracts transactions automatically, and you're prompted to review and categorise them in a single flow. This is the fastest method if you have a dedicated business bank account or work with a letting agent.

2. Manual entry

Add transactions one at a time as they happen. This works well if you use a cash account or pay for property expenses through your personal accounts. You can also upload receipts directly, and Provestor will extract the amount and date using AI.

What every transaction needs

Regardless of how you add transactions, each one needs:

  • Amount and date
  • Category (e.g. repairs, insurance, rent received)
  • Linked property (which property this relates to)

Provestor prompts you to add these details when reviewing uploaded transactions or entering them manually. For guidance on categorisation, see Which category should I use?.

When to do record keeping

Most landlords find it easiest to update their records on a regular schedule:

  • Weekly — Spend 10-15 minutes each week entering transactions. Keeps everything current and reduces errors.
  • Monthly — Batch entry once a month. More efficient if you have few transactions.
  • Quarterly — Enter everything before each quarterly deadline. This meets the minimum requirement, though more frequent updates tend to be less stressful and more accurate.

Choose the frequency that fits your routine. What matters most is consistency — irregular record keeping creates gaps and makes reconciliation harder.

You must have your records up to date before each quarterly deadline. See Your quarterly deadlines for when your updates are due.

For tips on establishing a routine and using Provestor's efficiency features, see Record keeping best practices.

Your record keeping checklist

Your workflow depends on how you manage banking for your rental properties.

Use the Record keeping checklist for step-by-step guidance. Choose the section that matches your setup:

  • Cash account — If you don't have a dedicated business bank account
  • Business bank account — If you have a separate account for your rental properties
  • Letting agent — If your agent collects rent and pays expenses on your behalf

The checklist gives you actionable steps to follow each time you sit down to update your records.

Next steps

PreviousWhat's Next?
NextUploading Bank Statements

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